According to the report, ‘AusNet will pay more than $260 million, maintenance company Utility Service Providers will pay $10 million and the Victorian Government will contribute $29 million.’ Even though they are paying in excess of $260 million AusNet is maintaining its position that it is not liable for the damages: ‘AusNet Services maintains that there was no negligence on the part of AusNet Services which caused, or contributed to, the Murrindindi bushfire, nor any of the other Black Saturday fires.”

So why settle? There was a $494 million dollar settlement of the claims arising out of the Kilmore East-Kinglake fire (see Settlement in Black Saturday litigation is approved (December 23, 2014)). Out of that settlement $60 million was to go on the plaintiff’s legal costs. If the matter had gone to trial it was expected that it would take 5 years. It’s not hard to see that running the trial would have cost all the parties more than the actual settlement, so if it’s a choice of paying the claimants $494 million (less $60 million) now, or paying a similar amount to the lawyers to keep fighting with no guaranteed result, you can see why it’s a sensible decision to settle now rather than let the matter drag on with no benefit to anyone.

I reiterate too, that the settlement will not send any of the defendants, or their insurers bankrupt. It’s just part of the cost of doing business – see (see ‘Bushfires; the price we pay for electricity’ (May 20, 2014)).